GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: Steady to 2 cents lower.
Wheat: 4 to 6 cents higher.
GENERAL COMMENTS: Wheat led strength overnight though went into the break well off session highs, corn and soybeans followed suit, posting early overnight gains but weakening into the break. Buyers have showed up on the open so far this week in each of the three, which could quickly negate this morning’s weakness. Outside markets are unfavorable this morning as front-month crude oil futures continue to trade near recent lows and the U.S dollar index is trading around 150 points higher, continuing to bounce off long-term support.
Controversial cost estimates from the Congressional Budget Office (CBO) signal a funding gap in the Title I safety net programs that would boost the federal deficit by $38 billion to $39.3 billion — after accounting for the $8 billion in savings provided by suspending USDA’s Section 5 spending authority via the Commodity Credit Corporation (CCC). Meanwhile, CBO says the voluntary base update available to some producers is estimated to tally just over $9 billion to nearly $11 billion. House Ag GOP staff say the savings from the CCC suspension should total $53 billion. Some Democrats may use the CBO scoring to vote against the bill in an Ag Committee markup slated to begin 11 a.m. ET Thursday. USDA Secretary Tom Vilsack has repeatedly stated it would be a mistake to limit the Agriculture secretary’s authority via CCC to aid farmers.
Illinois is poised to reap record wheat yields, the Illinois Wheat Association said following a one-day crop tour of the state, besting last year’s all-time high. The tour projected an average yield of 104 bu. per acre after scouting 59 fields, mostly in the state’s southern third. A year ago, the same tour projected an average yield of 97.1 bu. per acre. However, with harvest still a few weeks away, crop scouts on the tour cautioned that disease pressure, amplified by wet conditions this spring, could reduce final yields. Scouts noted the presence of fusarium head blight, a fungal disease also known as head scab, in many fields.
The Biden administration plans to release one million barrels (about 42 million gallons) of gasoline from the Northeast Gasoline Supply Reserve to lower retail prices before the July 4 holiday. The Energy Department aims to maximize the impact on prices, with current gas prices averaging $3.584 per gallon, down for the fourth consecutive week and 6.4 cents lower than last month. The gasoline will be delivered to retailers and terminals in 100,000-barrel quantities, with a focus on a competitive bidding process, timely supply before the July 4 holiday, and competitive pricing.
Regular rounds of rain will continue across the Midwest into Friday keeping planting at a minimum in many areas, notes World Weather Inc. Shower activity will diminish and conditions for fieldwork will improve Monday into Thursday of next week.
CORN: July corn futures followed wheat higher overnight. Bulls are seeking to overcome resistance at the 100-day moving average at $4.61 1/2, while further buying seeks to overcome resistance at Monday’s high of $4.63 1/2. Support comes in at $4.58, the 20-day moving average, then $4.55 1/4.
SOYBEANS: July soybean futures gave up overnight gains into the break. Bulls are seeking to overcome resistance at $12.48, which is reinforced by the psychological $12.50 mark. Support comes in at yesterday’s low of $12.30, then the 100-day moving average at $12.23.
WHEAT: July SRW futures surged to a fresh for-the-move high overnight. Initial resistance stands at the overnight high of $7.16 3/4 and finds significant backing from $7.25. Bulls are seeking to hold prices above the $7.00 mark, which acted as firm resistance for the past week and a half. Further selling finds support at $6.87, then the 10-day moving average at $6.73.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to continue to trade higher as cash fundamental strengthen. Packer margins are in the black after an extended period of red ink, thanks to surging wholesale beef prices. Choice cutout firmed 32 cents to $313.02 Tuesday, while Select gained $1.52 to $300.87, surpassing the psychological $300.00 mark. The continued strength in the wholesale market is giving feedlots hope for firmer cash cattle bids for the fifth consecutive week, though packers may be reluctant to raise bids given next week’s holiday-shortened slaughter schedule and their recent hefty purchases.
HOGS: Lean hog futures are expected to open with a mostly weaker tone as prices continue to chop lower on the daily bar chart. Futures have alternated between higher and lower closes for nine consecutive sessions as the former sideways chop has turned into prices bleeding slowly lower. The CME lean hog index is down 21 cents to $92.10 as of May 20, the second consecutive daily decline. June futures retain a modest premium, though traders have been actively removing premium from futures as they maintain a generally pessimistic outlook for the summer rally. Wholesale pork fell $1.08 to $100.69 with loins leading losses on Tuesday, though movement remained fairly firm at 297.71 loads.